Pilbara Minerals Ltd [ASX:PLS] rose 9.43% today, and is currently trading at 87 cents after closing at 79.5 cents yesterday.
Despite a rough start to the year, things are starting to look up for the company. This is the largest one-day increase since hitting a record high of $1.22 per share on 9 January.
Why did the PLS share price rise?
Pilbara Minerals announced today that they have completed stage two of the pre-feasibility study (PFS) in the Pilgangoora lithium-tantalum resource, which has delivered exceptional results, in turn driving up the share price.
The outstanding results demonstrate the strong financial and technical value of the expansion project, which is scheduled for completion in mid-2018.
Ken Brinsden, managing director and CEO of Pilbara Minerals, said:
‘The compelling results of the Stage 2 PFS provided a clear pathway to unlock further value in the outstanding Pilgangoora lithium-tantalum resource and, in the process, cement its position as a globally significant, low-cost supplier of lithium raw materials for decades to come.
‘The exponential growth which is occurring across the lithium-ion supply chain as the industry in China and elsewhere gears up for transformational growth to meet demand from the automotive and energy storage sectors is now becoming better understood.’
What’s next for Pilbara Minerals?
The PFS indicates that the expansion of Pilgangoora will be a strong, high-margin project. The forecasted life-of-mine revenue is AU$11.5 billion. For the first five years of operation, revenues are expected to be AU$3.12 billion.
The result from the PFS validates the Pilgangoora project’s scale, long life and economic return. Based on the information provided by Pilbara, the company has the potential to take full advantage of the current and future demand for lithium raw materials.
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Publisher, Money Morning
Analyst, Money Morning